I like VZ. It's a huge company with ironclad cash flow, strong earnings that are growing, market share increasing, and a decent enough balance sheet. Factoring in the numbers, I think it's worth $35 a share, but it keeps hovering in this 28-32 range. Any thoughts on why? Anypone bearish on it?
It'll get up there eventually. VZ is not sexy enough, unlike BAC or AAPL, to attract buyers. VZ didn't exactly come out of the last recession so hot either. Amazing dividends and near the 10 year lows; you can't complain much.
This is like AT&T and any utility co., it trades like a bond, flat. Although its a nice buy/write to play with.
I made my initial investment around April. I've actually done really well with the buy-writing on this one... it's in my Roth IRA and my 'cost-basis' with options income included is about $25.50 per share, and I hope to hold it for years. I don't have a call written against it, and I've been hesitant because I really feel like this is ready for a $1- $2 rally. patience, patience patience...
IMO, VZ and T are going to have serious problems facing increasing competition in wireless. And wireless has been their main base of support as individuals and businesses have been pulling their landlines for the past few years. The rates for wireless are going to follow the same path as the rates for long distance and local calling. Down...down...down. So where is new revenue going to come from? I don't see it.
VZ revenues 2008 - 97,354.00 2007 - 93,469.00 2006 - 88,182.00 2005 - 69,518.00 I pulled these off of google finance. VZ made about 98Bil in revenues last year, which comes down to about $300/year for every american man woman and child. VZ and Aapl are showing us that there is A LOT of money to be made in wireless. The majority of VZ's earnings come from wireless, and while their FiOs is marginally profitable now, I believe it will be very profitable in 3 years when they spend less on advertising and growing the network. VZ has made itself the largest wireless provider in the world, and they are slowly but surely taking market share from Comcast. And given their revenue(and earnings) growth, I don't see any big reasons why this trend is going to change.
Check out the current issue of Forbes magazine, November 16, 2009. The front cover says: "The $10 phone bill" "AT&T and Verizon's Worst Nightmare is Starting to Happen" I have not read the article yet, but long-term, it can't be good...
http://www.forbes.com/forbes/2009/1116/technology-mobile-4G-telephony-metropcs.html Here's the link to the article. It's a very good read, thanks for letting me know about it. When I read statistics and graphs, you always have to think a little deeper. The cost of calls has gone down because all the towers and infrastructures are in place- VZ owns most of them. Cell phone call minutes aren't climbing as fast- because people are texting. This article was written to stir things up, but I'm pretty sure cell phones will be both valuable and lucrative business in 5 years. The future of technology lies with the cell phone. The cell phone that can do navigation, the cell phone that can surf the internet, the cell phone that can stream video... and in my opinion, VZ will continue to be on top of these trends. Their partnerships with RIMM and GOOG should be fruitful, and VZ is not yet at a point where they seem overvalued from a share price point. I could be dead wrong... but I'm giving a booyah buy buy buy on VZ.
Wow!! A post on ET where traders/investors actually have a rational discussion which could be of benefit to the rest of us. My hat is off to all of you.